BofA Survey Reveals Investor Concern Over Capex Race at Record High

Bank of America's most recent fund manager survey indicates a record level of investor belief that corporations are excessively increasing their expenditures.

Strategist Michael Hartnett noted that although survey participants displayed the highest level of optimism since June 2021, approximately 35% cautioned that companies are overinvesting. This figure represents the largest share recorded in data spanning the last twenty years. Investors are also reducing their holdings in technology stocks.

Record levels of capital expenditure are expected this year, with the four biggest US technology companies together forecasting spending of about $650 billion in 2026. Market reaction to these projections has been mixed. Microsoft Corp. plunged the most in almost six years on concerns about how long it might take for investments to pay off, while Meta Platforms Inc. jumped more than 11% after it revealed its ambitious AI spending plans.

A quarter of participants in the latest BofA survey saw an “AI bubble” as the top tail risk to markets, while 30% said capital expenditure on AI by the big tech companies was the most likely source of a credit crisis.

Source: Bank of America

Participants see capital expenditure as “too hot right now,” Hartnett said, even though they also have the most upbeat view on global corporate earnings since August 2021.

Meanwhile, investors are rotating out of technology stocks and the US dollar, and increasing allocations to energy, materials and consumer staples, Hartnett wrote in the note. The drop in exposure to technology is the largest since March 2025, with respondents only net 5% overweight on the sector, down from net 19% a month ago.

Rotation out of US stocks and into emerging and European markets is the highest it has been since February 2021.

In other respects, the recent outstanding performance of small-cap stocks has highlighted that the market is shifting from a sector dominated by technology stocks to other sectors. A survey shows that since April 2021, investors' holdings of small-cap stocks have exceeded those of large-cap stocks.

This global survey by Bank of America was conducted from February 6th to February 12th and involved a total of 162 participants with a combined asset value of $440 billion.